Microsoft Corp. today announced revenue of $13.76 billion for the quarter ended September 30, 2007, a 27% increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.92 billion, $4.29 billion and $0.45, respectively.

"This fiscal year is off to an outstanding start with the fastest revenue growth of any first quarter since 1999," said Chris Liddell, chief financial officer at Microsoft. "Operating income growth of over 30% also reflects our ability to translate revenue into profits while making strategic investments for the future."

Microsoft's businesses of Client, Microsoft Business Division, and Server and Tools grew combined revenue in excess of 20%, and experienced robust demand for Windows Vista, the 2007 Microsoft Office system, Windows Server, and SQL Server.

"Customer demand for Windows Vista this quarter continued to build with double-digit growth in multi-year agreements by businesses and with the vast majority of consumers purchasing premium editions," said Kevin Johnson, president of the Platform and Services Division at Microsoft.

During the quarter, Microsoft's two consumer focused divisions passed milestones with the successful close of the company's largest ever acquisition, aQuantive, and Halo 3 achieving the biggest entertainment launch day in history.

"Backed by an amazing product line-up, our sales force, marketing teams, and partners delivered another excellent quarter," said Kevin Turner, chief operating officer at Microsoft.

Business Outlook

Microsoft management offers the following guidance for the quarter ending December 31, 2007:

• Revenue is expected to be in the range of $15.6 billion to $16.1 billion.
• Operating income is expected to be in the range of $5.9 billion to $6.1 billion.
• Diluted earnings per share are expected to be in the range of $0.44 to $0.46.

Management offers the following guidance for the full fiscal year ending June 30, 2008:

• Revenue is expected to be in the range of $58.8 billion to $59.7 billion.
• Operating income is expected to be in the range of $23.3 billion to $23.7 billion.
• Diluted earnings per share are expected to be in the range of $1.78 to $1.81.

The foregoing full fiscal year guidance includes approximately $85 million of estimated integration costs and in-process research and development expenses, or a $0.01 impact to diluted earnings per share, due to the acquisition of aQuantive.